Saturday, 2 June 2012

Burma Govt Wants Investment Focus Away from Natural Resources

BANGKOK—Burma’s Energy Minister Than Htay on Friday told a Bangkok audience of international business leaders and government officials that the government wants to change the country’s foreign investment focus away from oil and gas toward more job-intensive sectors.

“Huge amounts of foreign investment are likely to come,” said the minister, but nonetheless “the government wants to replace resource-based foreign investment with production-based investment.”

With Western sanctions relaxed or suspended, the Burmese government is hopeful of coaxing a variety of investors into Burma with a proposed new foreign investment law and special economic zones tied to seaports at Dawei, Thiliha and Kyaukpyu.

Reading from a prepared statement to the World Economic Forum (WEF) in Bangkok, the minister expounded on “The Promise and Future of Myanmar,” talking-up the country’s recent political reforms and urging investors and tourists to put Burma on their to-do lists for the near future.

Minister Than Htay said that investment needs to create jobs for ordinary Burmese, adding that “the government wants to improve living standards for all Burmese and is not just trying to improve GDP.”

For that to happen, however, will take time and work, say analysts. In a press conference at the WEF earlier Friday, Nobel economics laureate Prof Joseph Stiglitz cautioned that Burma “needs the creation of a whole set of legal frameworks to get plugged into the global economy,” mentioning land law and intellectual property rights.

Burma is rich in gas, oil, gemstones and hydropower, and investment to date has largely focused on these extractive sectors, prompting fears that Burma could succumb to a “resource curse” that has seen resource-dependent economies elsewhere fall prey to corruption, civil conflict and poverty.

Prof. Stiglitz, who visited Burma in February, warned that “Myanmar needs to make sure that natural resources are used in ways to avoid the resource curse and make it a blessing.”

Burma’s landscape and physical beauty is a largely untapped resource that the government hopes to capitalize on. With a minuscule few hundred thousands tourists visiting each year, the Burma government hopes to eat into a market that not only sees neighbouring Thailand attract between 15-20 million visitors per annum, with other countries such as Vietnam and Philippines pulling in 4-5 million each.

“Myanmar is an exceedingly-attractive tourist destination,” said the minister. “We have historical monuments, rivers, beaches, flora and fauna, and unique to southeast Asia, have high mountains for adventure-seeking tourists.”

Aung San Suu Kyi sat quietly in the front row during the minister’s speech, which was not followed with a question and answer session aside from a couple of issues raised by WEF head Klaus Schwab.

Earlier, at a press conference on Friday morning, Suu Kyi said she was looking forward to the minister’s speech, in the wake of mass candlelit protests in Burma in recent weeks over ongoing electricity shortages.

Despite billions of dollars in gas, oil and hydropower revenue, an estimated 75 percent of Burma’s people do not have electricity. With that in mind, Suu Kyi recounted how she was invited to the cockpit by the pilot during her flight to Bangkok on Tuesday evening, telling that she was captivated by the canopy of lights beneath as the flight approached the vast Thai capital. Noting the contrast with dimly lit Rangoon, she said that “the difference is considerable,” alluding to the disparity in development between the two cities.

Than Htay listed Burma’s political reforms to the WEF, citing four separate amnesties for political prisoners, the creation of laws that “protect the right of citizens to peaceful assembly, and the beginning of peace processes with Burma’s armed ethnic groups that the government hopes “will bring eternal peace.”

In the wake of these reforms, Western economic sanctions on Burma have been relaxed or suspended. Speaking on Friday morning, Suu Kyi said, “I support suspension of sanctions as it shows that reforms will be rewarded,” but warned that the government and investors must be transparent about investment in Burma in future. “The reason we had problems with Dawei and other projects is that the people of Burma were kept completely in the dark,” she said.

Minister Than Htay spoke at the WEF in place of President Thein Sein who postponed his visit to Thailand until next week in the wake of the announcement that Suu Kyi would travel to Thailand for the WEF. The minister relayed an invitation from President Thein Sein for the WEF to stage its 2013 Asia event in Burma, which was accepted by WEF head Klaus Schwab.